Labeling Program Could Spark Trade War with Canada and Mexico

Source: Associated Press | Feb 05, 2014

Livestock and meat organizations that were upset and dismayed that congress opted in the newly passed farm bill not to back away from mandatory country of origin labeling[3] requirements are worried that the issue could start a trade war with Canada and Mexico, according to a recent AP story.

Previous labeling rules required only the country of origin to be noted, such as "Product of U.S." or "Product of U.S. and Canada." New rules that took effect last year require that labels for steaks, ribs and other cuts of meat include clear information about where the animals were born, raised and slaughtered. Labels must specify, for example, "Born in Mexico, raised and slaughtered in the United States."

Country of original labeling supporters, including consumer groups, environmental groups and some independent farmers, say the requirements give consumers valuable information. But livestock groups and meatpackers say it's costly to have to segregate and track animals along the entire supply chain.

Cory Eich, a cow-calf rancher from Canova, S.D., notes that country of origin labeling frequently is incorrectly portrayed as a food safety issue, as all meat sold in the United States is inspected by the U.S. Department of Agriculture. He noted the dozens of voluntary marketing programs, such as Certified Angus Beef, that allow consumers to buy whatever they want.

Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., said the farm bill is a huge win for ranchers, as it includes a permanent livestock disaster assistance program, a livestock forage program and export assistance. But some of the groups came in to the House and Senate wanting to repeal country of origin labeling. Stabenow says there would not have been enough votes to achieve that goal.

Congress' decision not to address the issue has drawn criticism from Canadian officials, who say the country may retaliate by imposing tariffs on a wide range of American products.

Federal Agriculture Minister Gerry Ritz and International Trade Minister Ed Fast said the detailed origin labels drive up the price of Canadian exports and undermine competitiveness, causing about $1 billion a year in losses. A public hearing before the World Trade Organization is set for Feb. 18 in Geneva.

"By refusing to fix country of origin labelling, the U.S. is effectively legislating its own citizens out of work, and harming Canadian and American livestock producers alike by disrupting the highly-integrated North American meat industry supply chain," the ministers said last week in a statement.

A half dozen national meat groups expressed their concern about the trade threats in a Jan. 27 letter to the ranking members on the House and Senate agriculture committees.

The American Meat Institute, the National Catttleman's Beef Association, the National Chicken Council, the National Pork Producers Council, the National Turkey Federation and the North American Meat Association said they offered many solutions and all were rejected. The groups say the sorting requirements add too many costs for meatpackers.

"This retaliation will be crippling to our industries and threaten the long-term relationship with two of our most important export markets," the groups wrote. "COOL is a broken program that has only added costs to our industries without any measurable benefit for America's livestock producers."